Another Day Another TaxPayer Backed Energy Company Goes Bankrupt

President Obama spoke highly of the Ener1 battery company during his State of the Union address, noting that taxpayer funded loans to the private company have made it one of the leading manufacturers of its kind. According to the president the bipartisan-approved 118 million dollar grant from the US Energy Department has made America “the world leading manufacturer of high-tech batteries.” Now if only he can explain why two days after his speech the company filed for bankruptcy.

According to papers made available last week Ener1 had $73.9 million in assets but a debt of $90.5 million as of December 31. They filed Chapter 11 papers in a New York City branch of the US Bankruptcy Court the day before the information was released.

In the filing, interim CEO Alex Sorokinsays said that competition in east Asia, “which generally have a lower cost manufacturing base,” had caused Ener1 to bite the bullet. The company’s EnerDel division received around $55 million of the federal grant so far but wasn’t able to make the company profitable even with help from Washington.

Last year private energy company, California-based solar-panel makers Solyndra, filed for bankruptcy. Obama had also touted them as a success during his 2010 State of the Union Address.

“You can see the results of last year’s investments in clean energy,” Obama said in 2010. He then referenced Solyndra, calling it a business “that will put a thousand people to work making solar panels.”

Solyndra received a massive government loan before going belly up by late 2011.

An investigation, which is still ongoing, was launched to see what role the White House had with Solyndra executives that could have caused the administration to approve the dubious loan, which was valued at $535 million. The company, like Ener1, also blamed international competition, saying in a statement from September, “Solyndra could not achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers.”

The Department of Energy also approved a $43 million loan to Beacon Power. They were supposed to build a flywheel power plant in New York State during 2009, but three months later filed Chapter 11. Beacon was extended the grant so that they could build a plant in Stephentown, NY, but agreed in November to sell the facility in order to pay back the Energy Department.

Solyndra, who used all but $8 million of its federal funding, also owes private investors around $70 million.

While Republicans have largely been the ones to attack Obama over his role with Solyndra, the Department of Energy offering to Ener1 was one that was agreed on by both sides of the aisle.

“Unfortunately, you can now add Ener1 to the growing list of failed companies that went belly up after hundreds of millions of dollars in administration backing,” Florida Republican Representative Cliff Stearns says of this week’s news. Congressman Stearns had previously called the Solyndra contract a “casualty of the Obama administration’s failed stimulus.”

In all this brings that growing list to at least thirteen.

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3 Comments

  1. Nice update! Again, another company has fallen victim of the unnecessary changes the government has done.

  2. I wouldn’t call these companies victims, to me it seems like a nice little scam they have going in which they set up these BS companies get a tax payer backed loan and then declare bankruptcy. What exactly happens to the billions in loans they got??? So far I’ve only heard of maybe 2 of these companies that are supposedly attempting to pay the money back. It looks to me like this whole green energy initiative is just kick backs for politically connected Obama supporters…

  3. […] especially considering that we spent at least a trillion dollars on said recovery. Obama’s green jobs initiative has been an abject failure and his administration has absolutely refused to prosecute any of the big […]


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